Healthcare Costs Top $20K Per Family

Margaret Dick Tocknell, May 16, 2012

The national annual cost of medical care for a typical family of four with PPO coverage has edged up over $20,000 for the first time, according to the actuarial and consulting firm, Milliman.

The 2012 Milliman Medical Index estimates the annual cost at $20,728. That's a record $1,335 increase in the total cost of care compared with 2011, and the first time the cost has notched above the $20K mark since Milliman started reporting on these costs twelve years ago.

2012 Milliman Medical Index

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Through a combination of copayments, deductions, and premiums, the prototypical family of four will be responsible for a record share—42%—of its medical costs.

A combination of factors is driving the increase, including the comparative lack of control insurers exert on outpatients costs, a slowdown in hospital bed utilization, and the cost of technology in patient care, explains Chris Girod, principal and consulting actuary in Milliman's San Diego office and a co-author of the report.

The good news? The pace of the increase is slowing. The 6.9% increase in total costs is the lowest annual rate of increase in more than a decade.

The MMI is comprised of five components: inpatient facility care, outpatient facility care, physician services, pharmacy, and miscellaneous other.  View slideshow.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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